Rooftop solar in South Africa has more capacity than Eskom’s largest power station

Private companies and households have installed more solar capacity – 5,400 MW – in South Africa than Eskom’s two largest power stations, Medupi and Kusile, which have a capacity of 4,800 MW each. 

Eskom’s latest Weekly System Status Report revealed the rooftop solar capacity installed in the country at the end of January. 

The report showed that private companies and households installed over 2,400 MW of rooftop solar in the past year. 

Eskom estimates the amount of rooftop solar installed in the country by measuring the decrease in electricity demand on optimal solar generation days compared to sub-optimal days.

It previously said that behind-the-meter solar installations have helped stave off higher stages of load shedding on sunny days.

Solar PV is, therefore, helping the country avoid higher load-shedding stages. However, it comes at a revenue cost to Eskom.

Its latest financial results showed that the reduction in demand caused by solar installations resulted in its sales declining by over 2%.

As of the end of January 2024, private households and companies had installed 5,412 MW of rooftop solar, according to Eskom’s calculations. 

This capacity exceeds that of Eskom’s largest coal-fired power stations, Medupi and Kusile. These stations have a nominal capacity of 4,800 MW each. 

Medupi and Kusile have not run at maximum capacity due to delays in finishing the stations, design flaws, and mismanagement. 

It must be noted that the country’s 5,412 MW of solar capacity refers to its nominal capacity and does not mean private installations are generating more power than Medupi and Kusile. 

Eskom in a death spiral 

Source: Weekly System Status Report – 2024 Week 7

The rapid uptake of rooftop solar from private companies and households has reduced demand for Eskom’s electricity. 

The decline in households and businesses using Eskom aligns with what many experts predicted – private electricity generation taking over from the state-owned utility.

Economist Dawie Roodt said Eskom’s generation division is slowly dying, similar to South African Airways (SAA) and the South African Post Office (SAPO).

Research from RMB Morgan Stanley also showed that the private sector will effectively replace Eskom’s generation fleet in the next few years.

They argue that in the long term, electricity generation will be private, with Eskom merely distributing electricity.

Two former Eskom CEOs, Matshela Koko and Andre de Ruyter, have also sounded the alarm regarding the current trend.

In an interview with Sizwe Mpofu-Walsh on his YouTube channel SMWX, Koko said that Eskom risks becoming irrelevant.

“Eskom’s sales volumes are declining by an average 2.5% year-on-year,” Koko said. “If it continues to decline, there will be no Eskom in 10 years.”

He said the question is not whether Eskom will be privatised in the future. It is whether it will exist or not.

During Koko’s tenure at Eskom, the company generated roughly R1 billion in revenue from electricity sales in a week. It has declined to R800 million today.

“The writing is on the wall. This is what is called a death spiral. This Eskom is dying,” Koko said.

He slammed the ANC government as incompetent regarding the energy sector. “Here is a utility that’s got 52,000MW of nominal capacity, and its sales volumes are declining.”

Andre de Ruyter
Former Eskom CEO Andre de Ruyter

Andre de Ruyter told Business Day Spotlight that Eskom’s current path is unsustainable.

“If you extrapolate from current trends, Eskom will eventually be left with a customer base of people who cannot afford electricity and therefore don’t pay for it,” he warned.

This comes as more South Africans have turned to energy sources like solar panels as a more reliable alternative to the state-owned power utility.

However, only wealthier South Africans can afford these alternative options, while poorer citizens still rely on Eskom.

De Ruyter explained that if this trend continues, Eskom will be left with only non-paying customers, who can either not afford electricity or refuse to pay. This can include private citizens and municipalities.

Eskom already faces severe challenges with non-payment from citizens and municipalities. 

In 2018, invoiced municipal debt totalled a mere R13.6 billion. This grew to R70 billion at the end of September 2023, a 32% increase from the previous year. 

The payment levels of municipalities continued to deteriorate, declining by 2% in the 2023 financial year to 76%.


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